Correlation Between Summa Silver and Hunter Creek

Can any of the company-specific risk be diversified away by investing in both Summa Silver and Hunter Creek at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Summa Silver and Hunter Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Summa Silver Corp and Hunter Creek Mining, you can compare the effects of market volatilities on Summa Silver and Hunter Creek and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Summa Silver with a short position of Hunter Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summa Silver and Hunter Creek.

Diversification Opportunities for Summa Silver and Hunter Creek

0.0

Correlation Coefficient

Summa Silver  Hunter Creek

Pay attention - limited upside

The 3 months correlation between Summa and Hunter is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Summa Silver Corp and Hunter Creek Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunter Creek Mining and Summa Silver is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Summa Silver Corp are associated (or correlated) with Hunter Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunter Creek Mining has no effect on the direction of Summa Silver i.e., Summa Silver and Hunter Creek go up and down completely randomly.

Pair Corralation between Summa Silver and Hunter Creek

Assuming the 90 days horizon Summa Silver Corp is expected to generate 1.11 times more return on investment than Hunter Creek. However, Summa Silver is 1.11 times more volatile than Hunter Creek Mining. It trades about -0.01 of its potential returns per unit of risk. Hunter Creek Mining is currently generating about -0.05 per unit of risk. If you would invest  44.00  in Summa Silver Corp on October 24, 2024 and sell it today you would lose (20.00) from holding Summa Silver Corp or give up 45.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.28%
Values	Daily Returns

Summa Silver Corp  vs.  Hunter Creek Mining

Summa Silver Corp

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Summa Silver Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Hunter Creek Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hunter Creek Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Hunter Creek is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Summa Silver and Hunter Creek

The main advantage of trading using opposite Summa Silver and Hunter Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summa Silver position performs unexpectedly, Hunter Creek can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hunter Creek will offset losses from the drop in Hunter Creek's long position.

The idea behind Summa Silver Corp and Hunter Creek Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.